Pittsburgh Testing Lab v. Farnsworth & Chambers Co., 5661.

• Decision Date: 06 January 1958
• Docket Number: No. 5661.,5661.
• Citation: 251 F.2d 77
• Court: U.S. Court of Appeals — Tenth Circuit
• Parties: PITTSBURGH TESTING LABORATORY, a corporation, Appellant, v. FARNSWORTH & CHAMBERS CO., Inc., a corporation, Appellee.

251 F.2d 77 (1958)

PITTSBURGH TESTING LABORATORY, a corporation, Appellant, v. FARNSWORTH & CHAMBERS CO., Inc., a corporation, Appellee.

No. 5661.

United States Court of Appeals Tenth Circuit.

January 6, 1958.

R. L. Davidson, Jr., Tulsa, Okl. (Joe B. Houston, Tulsa, Okl., was with him on the brief), for appellant.

John H. Poe, Tulsa, Okl. (Austin Wilson, Houston, Tex., was with him on the brief), for appellee.

Before PHILLIPS, MURRAH and BREITENSTEIN, Circuit Judges.

MURRAH, Circuit Judge.

This is an appeal from a judgment of the District Court invalidating, for lack of consideration, an oral contract to pay additional compensation for services rendered in connection with the performance of an antecedent written contract. Jurisdiction is based upon diversity of citizenship and requisite amount in controversy.

According to the unchallenged findings of the trial court, the appellant, Pittsburgh Testing Laboratory, entered into a written subcontract with the appellee, Farnsworth & Chambers, Inc., under the terms of which the Testing Company agreed to do all of the testing and inspection of materials required under a master contract between Farnsworth and the Douglas Aircraft Corporation for the construction of concrete ramps and runways at Tulsa, Oklahoma. The consideration for the performance of the service was $24,450, to be paid in seven monthly installments, less ten percent retainage until completion of the contract. In the preliminary negotiations, Farnsworth estimated that the job would be completed in seven months, or October 15, 1952, on the basis of a ten-hour day, sixty-hour work week, and that the Testing Company's work would be concluded about November 1. While these representations undoubtedly formed the basis for Pittsburgh's proposal and for the lump sum compensation in the contract, there was no guarantee of a completion date or hour work week. Before the end of the seven months period, and in September 1952, it became manifest that the contract would not be completed within the estimated time, due principally to the necessity of moving 1,200,000 tons of dirt or material instead of the estimated 600,000 tons. A controversy thereupon arose between the parties as to Pittsburgh's obligation under the written contract and Farnsworth's liability for overtime compensation to Pittsburgh's personnel for work in excess of the sixty-hour week. Pittsburgh was told by Farnsworth's representatives that if it would continue to perform its services, it would be compensated. When, however, no payments were made in December 1952, Pittsburgh refused to proceed unless a new contract was entered into providing payment for the remaining work at the rate of $3,492.85 per month from November 1 until the completion of the work, plus time and one-half for all man hours worked over sixty hours per week. On December 20, the parties entered into an oral contract to that effect and Pittsburgh continued to perform the same service and to submit invoices for the monthly compensation, and separate invoices for overtime pay in excess of the sixty hours per week. Although Farnsworth did not remit for the invoices or reply to Pittsburgh's persistent statements, it made no protest or objection to either the statements for the stipulated additional compensation or the separate statements for the overtime. After the work was completed in the Spring of 1953, and Pittsburgh had been paid the balance of the retainage under the original contract, Farnsworth finally repudiated the oral agreement and this suit followed.

The trial court specifically found that at the time of making the oral contract to pay additional compensation, plus overtime, a bona fide dispute existed between the parties concerning their respective obligations under the written contract. The trial court also specifically found, however, that the Testing Company performed no services pursuant to the oral contract which it was not already bound to do by the terms of the written contract. Based on these findings, the trial court finally concluded that the oral contract was unenforceable for want of consideration, and that Farnsworth was not estopped to defend on that basis.

It is the general rule, followed in Oklahoma where this contract was made and performed, that a promise to pay additional compensation for the doing of that which the promisee is already legally bound to do or perform, is insufficient consideration for a valid and enforceable contract. Jackson Materials Co. v. Grand River Dam...